For most of 2021 and 2022, broad swaths of the economy dealt with supply chain disruptions that affected the availability of wine and video game consoles to cars and eggs. For cars and consumer electronics, even if manufacturers wanted to build more items, they didn’t have enough computer chips or raw materials to do so for more than a year. Car prices finally began falling in early 2023.
Many industries, including oil refining, cars and airlines, cut staff and production in 2020 at the outset of the Covid-19 pandemic, leaving them understaffed when demand for travel roared back.
Russia’s invasion of Ukraine and subsequent oil embargoes by the U.S. and the European Union have also further strained the global energy supply, isolating one of the world’s largest oil and gas producers and driving prices higher as countries scramble for replacements.
And rising natural gas prices have led to spikes in the cost of electricity, sending energy bills soaring in some cities.
The federal government has taken steps to combat rising prices. President Joe Biden authorized several withdrawals from the Strategic Petroleum Reserve, and more than 20 states, including New York, Connecticut and Georgia, either paused their local gas taxes or introduced legislation to do so.
The Federal Reserve has also raised interest rates several times in the past year to cool demand by making it more expensive for consumers and businesses to borrow money.
